Bajaj Finance arm Bajaj HF approves IPO; fresh issue of up to Rs 4,000-cr plus OFS

Bajaj Housing Finance, a subsidiary of parent Bajaj Finance, has approved an initial public offering comprising a fresh issue of equity shares of up to Rs 4,000 crore and an offer for sale of equity shares subject to market conditions, according to an exchange disclosure on June 6.

The draft red herring prospectus will be shortly filed with market regulator Sebi, sources told Moneycontrol.

The IPO of the home financier to comply with RBI’s regulatory norms for “upper layer” NBFC’s to list within three years of being notified, marks the return of the Bajaj Group to the public market after many years.

Moneycontrol was the first to report the firm’s listing plans on March 27.

Later on April 6, Moneycontrol was also the first to report the syndicate of advisors for the mega deal, namely Kotak Mahindra Capital, Axis Capital, BofA Securities, JM Financial and SBI Capital.

Blackstone-backed Aadhar Housing Finance and Westbridge-backed India Shelter Finance are two recent market debuts in the segment. The stocks of both firms have risen by 5.10 percent and 5.62 percent, respectively, in the last one month.

Regulatory regime for upper layer NBFCs

On September 30, 2022, the RBI announced the list of 16 NBFCs in the Upper Layer under Scale Based Regulation for NBFCs. The framework categorised NBFCs in Base Layer (NBFC-BL), Middle Layer (NBFC-ML), Upper Layer (NBFC-UL) and Top Layer (NBFC-TL). It specified that Upper Layer shall comprise of those NBFCs which are specifically identified by the Reserve Bank based on a set of parameters and scoring methodology.

Apart from Bajaj Housing Finance, the Upper Layer list also included Tata Sons, HDB Financial Services, Tata Capital Financial Services, Aditya Birla Finance and Shanghvi Finance.

A closer look at Bajaj Housing Finance

Bajaj Housing Finance has to list by September 2025 under the current regulatory timeline laid out by the RBI.

Last month, PhillipCapital anticipated that Bajaj Housing Finance will debut on the exchanges in September 2025 with an expected listing price of Rs 550-570 per share.

The brokerage is positive on the firm due to its emphasis on salaried home loans, stable expense ratio, and minimal credit costs, resulting in robust return ratios.

The firm is a diversified NBFC catering to more than 76.5 million customers across the country, according to its website. Based in Pune, Bajaj Housing Finance offers finance to individuals as well as corporate entities for the purchase and renovation of homes or commercial spaces.

It also provides loans against property for business or personal needs as well as working capital for business expansion purposes. The company also offers finance to developers engaged in the construction of residential and commercial properties, as well as lease rental discounts for developers and high-net-worth individuals.

For the nine months ended December 31, Bajaj Housing Finance had assets under management of Rs 85,929 crore, a 31 percent increase over the year earlier. Disbursements also rose by 31 percent to Rs 25,308 crore, while net profit increased by 41 percent to Rs 1,350 crore.